Opinion

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

Case No. 2:26-cv-02607-SB-MAR

ALBERT RAMOS,

Plaintiff,

ORDER DENYING PLAINTIFF’S

MOTION TO REMAND [DKT.

v.

NO. 18] AND DEFENDANTS’

NAVIENT CORPORATION et al., MOTION TO DISMISS [DKT. NO.

13]

Defendants.

Plaintiff Albert Ramos filed this case in state court, alleging that Defendants

Navient Corporation and Navient Solutions, LLC violated California law in

servicing his private student loans and reporting those loans to consumer credit

agencies. Defendants removed based on diversity jurisdiction and move to

dismiss. Plaintiff moves to remand. The Court held a hearing on May 29, 2026,

and now denies both motions.

I.

Plaintiff filed this action in Ventura County Superior Court in December

2025, alleging that Defendants, which he describes together as Navient,1

1 In their Rule 12(b)(6) motion, Defendants argue that Navient Corporation is not a

proper defendant because it is a holding company that does not engage in student

loan servicing. Dkt. No. 13 at 15–16. This argument is based on factual assertions

not contained in the complaint and does not support dismissal on a pleading

challenge. Plaintiff represents that he has repeatedly requested information from

Defendants about which entity owns the loans and that Defendants have not

provided it. The parties are ordered to meet and confer promptly in person or by

videoconference to seek agreement as to whether Navient Corporation is a proper

party. Before the meeting, Defendants shall provide Plaintiff the evidence they

contend establishes that Navient Corporation is not involved in the conduct alleged

in the complaint. No later than June 8, 2026, the parties shall file either a

stipulation to dismiss the claims against Navient Corporation or, if Plaintiff still

unlawfully serviced three private student loans he took out to attend the Art

Institute of California (AIOC). He alleges that AIOC induced him to enroll in a

bachelor’s degree program and to secure loans through a series of

misrepresentations about the program and his employment prospects that the

Department of Justice has since deemed fraudulent. Dkt. No. 1, Ex. A ¶¶ 37–47

(Compl.). Plaintiff secured a mix of public and private loans. Id. ¶ 53. Navient is

the successor to the entity from which Plaintiff secured three private loans. Id.

¶¶ 10–11, 48, 63. Navient created a process that allows debtors to apply to have

their loans discharged based on their schools’ misconduct. Id. ¶ 72. Plaintiff

applied for discharge, providing extensive documentation about AIOC’s fraud, but

his applications—one to Navient and one to another entity that briefly acted as a

subservicer to two of the loans—were denied without explanation. Id. ¶¶ 67–82.

Throughout this period, Navient continued its collection efforts, placing more than

45 calls to Plaintiff in a single month, contacting his employer on multiple

occasions, leaving voicemails for third parties, and sending collection letters to

Plaintiff’s deceased mother. Id. ¶¶ 88–94. Navient also reported the loans to credit

bureaus without any dispute notation, despite Plaintiff’s repeated written disputes

challenging the enforceability of the loans. Id. ¶¶ 19–20.

The complaint asserts claims against Navient Corporation and Navient

Solutions, LLC under California’s Student Borrower Bill of Rights (SBBR), the

Private Student Loan Collections Reform Act (PSLCRA), the Rosenthal Fair Debt

Collection Practices Act (Rosenthal Act), the Consumer Credit Reporting Agencies

Act (CCRAA), and the Unfair Competition Law (UCL). Plaintiff seeks damages,

restitution, a declaration that his debt was induced by fraud and unenforceable, and

a “public injunction” to prohibit Navient from engaging in various “unfair student

loan servicing conduct.” Compl. ¶ 4.

Defendants removed the case on March 11, 2026, invoking diversity

jurisdiction. Dkt. No. 1 ¶¶ 1–2. Defendants then moved to dismiss Plaintiff’s

claims (except those under the PSLCRA), and Plaintiff moved to remand.

II.

Plaintiff moves to remand the case in full or, in the alternative, for a partial

remand of only his UCL and SBBR claims—the claims in which he seeks a public

injunction. Dkt. No. 18. He argues that remand is required because the Court

believes he has a basis to pursue his claims against Navient Corporation, a joint

status report setting forth their respective positions.

lacks equitable jurisdiction over his request for a public injunction, and that

Defendants have taken inconsistent positions by removing the case and moving to

dismiss some of Plaintiff’s claims based on lack of standing.

A.

Federal courts are courts of limited jurisdiction. Subject-matter jurisdiction

refers to a court’s power to hear a case, while equitable jurisdiction concerns the

propriety of awarding a particular type of remedy. Guzman v. Polaris Indus., Inc.,

49 F.4th 1308, 1314 (9th Cir. 2022). To remove an action, a defendant “must

demonstrate that original subject-matter jurisdiction lies in the federal courts.”

Syngenta Crop Prot., Inc. v. Henson, 537 U.S. 28, 33 (2002).

Subject-matter jurisdiction exists where there is complete diversity of

citizenship and an amount in controversy exceeding $75,000. 28 U.S.C. § 1332(a).

Another “necessary component” of subject-matter jurisdiction is Article III

standing, which requires a showing that: (1) the plaintiff has suffered an injury in

fact that is concrete and particularized and actual or imminent; (2) the injury is

fairly traceable to the defendant’s challenged actions; and (3) it is likely that the

injury will be redressed by a favorable decision. Friends of the Earth, Inc. v.

Laidlaw Env’t Servs. (TOC), Inc., 528 U.S. 167, 180–81 (2000). Standing “is not

dispensed in gross; rather, plaintiffs must demonstrate standing for each claim that

they press and for each form of relief that they seek.” TransUnion LLC v.

Ramirez, 594 U.S. 413, 431 (2021).

B.

Plaintiff does not dispute that Defendants have established diversity

jurisdiction based on the allegations in the notice of removal; the parties are

undisputedly diverse, and the amount in controversy exceeds $75,000. Dkt. No. 1

¶¶ 2–3. Plaintiff argues, however, that remand is required because

(1) Defendants’ argument that Plaintiff lacks standing to obtain a public injunction

prevents them from meeting their burden of establishing subject-matter

jurisdiction, and (2) the Court lacks equitable jurisdiction.

1.

Plaintiff argues that Defendants’ position that his request for a public

injunction should be dismissed for lack of Article III standing necessarily

precludes them from establishing federal jurisdiction. This argument is meritless.

It is undisputed that an Article III case or controversy exists as to each of

Plaintiff’s claims and most of his asserted remedies,2 and “the presence of at least

some claims over which the district court has original jurisdiction is sufficient to

allow removal of an entire case, even if others of the claims alleged are beyond the

district court’s power to decide.” Lee v. Am. Nat’l Ins. Co., 260 F.3d 997, 1002–03

(9th Cir. 2001). Moreover, the possible “lack of [standing for] injunctive relief

does not equate to the lack of subject matter jurisdiction over the underlying

claim.” Cabral v. Supple, LLC, No. 12-CV-00085-MWF, 2016 WL 1180143, at

*3 (C.D. Cal. Mar. 24, 2016) (denying motion to remand because court had

original jurisdiction over all of plaintiff’s claims and “[t]he fact that Article III

prohibits Plaintiff from obtaining a certain type of remedy . . . does not detract

from that conclusion”). Thus, there is nothing inconsistent in Defendants’

positions that the Court has subject-matter jurisdiction over the case but that

Plaintiff lacks standing to seek a public injunction. Plaintiff’s invocation of

judicial estoppel likewise fails because it is predicated on the faulty assertion that

these positions are clearly inconsistent.

In sum, Plaintiff seeks multiple forms of relief, including damages and

restitution under the SBBR, PSLCRA, Rosenthal Act, and UCL. There is no

dispute that Plaintiff has standing to pursue his claims and most of his requested

remedies. The parties are diverse, and the jurisdictional threshold is met. This

Court plainly has subject-matter jurisdiction.

2.

Plaintiff further argues that, irrespective of Article III standing, the Court

lacks equitable jurisdiction to grant his requested injunctive relief and therefore

should remand the case as a matter of comity and federal-state relations. See

2 Even as to the injunction, Defendants do not meaningfully dispute that Plaintiff

has standing to seek injunctive relief for himself. To seek injunctive relief,

a plaintiff must “demonstrate a real and immediate threat of repeated injury in the

future.” Chapman v. Pier 1 Imports (U.S.) Inc., 631 F.3d 939, 946 (9th Cir. 2011)

(cleaned up). Plaintiff seeks to enjoin Defendants from engaging in unfair student

loan servicing practices, and he alleges ongoing harm: harassing collection calls

and the continued denial of his discharge application. Although Plaintiff

strategically avoids arguing in support of his own standing, neither party plausibly

shows that Plaintiff wholly lacks standing to seek injunctive relief. Instead, the

dispute appears to be over the appropriate scope of that remedy. That dispute does

not implicate the Court’s subject-matter jurisdiction. Guzman, 49 F.4th at 1314

(distinguishing between subject-matter and equitable jurisdiction).

Schlesinger v. Councilman, 420 U.S. 738, 754 (1975) (“the question of equitable

jurisdiction” concerns whether, “consistently with the principles governing

equitable relief[,] the court may exercise its remedial powers”).

The parties focus on what the Court should do if it lacks jurisdiction to issue

the injunction sought, but neither side meaningfully addresses the threshold issue

of whether the Court in fact has equitable jurisdiction over Plaintiff’s requests for

injunctive relief. Plaintiff seeks to require Defendants to (1) conduct good-faith

evaluations of borrower claims of school misconduct, (2) implement policies to

ensure that they provide timely and complete responses to borrowers, and

(3) implement policies to prevent harassing and abusive telephone calls and other

debt collection practices. Dkt. No. 1 ¶ 21. The parties label Plaintiff’s request as

one for a “public injunction,” which is a creature of California law that “has the

primary purpose and effect of prohibiting unlawful acts that threaten future injury

to the general public.” McGill v. Citibank, N.A., 2 Cal. 5th 945, 951 (2017)

(cleaned up). It is unclear whether Plaintiff’s requested relief meets this definition,

given that Plaintiff brings suit based on a private dispute over the servicing of his

loans and would benefit from the requested injunction prohibiting Defendants from

continuing the harassing conduct and requiring further evaluation of his request to

discharge more than $100,000 in debt. See Blair v. Rent-A-Center, Inc., 928 F.3d

819, 824 (9th Cir. 2019) (explaining that public injunctions “benefit the public

directly by the elimination of deceptive practices, but do not otherwise benefit the

plaintiff, who has already been injured, allegedly, by such practices and is aware of

them”) (cleaned up); Broughton v. Cigna Healthplans, 21 Cal. 4th 1066, 1080 &

n.5 (1999) (explaining that the purpose of a public injunction “is not to resolve a

private dispute but to remedy a public wrong” and recognizing that private

injunctions may have effects beyond the parties).

Assuming the Court lacks equitable jurisdiction to grant at least some of

Plaintiff’s requested relief, federal courts still “have a strict duty to exercise the

jurisdiction that is conferred upon them by Congress.” Quackenbush v. Allstate

Ins. Co., 517 U.S. 706, 716 (1996). Because the Court indisputably has subject-

matter jurisdiction over this action, wholesale remand of the case is not permitted.

See Lee, 260 F.3d at 1002 (“[A] district court may not under § 1447(c) remand a

case in its entirety where there is subject matter jurisdiction over some portion of

it.”). And nothing in the remand statute purports to authorize the remand of

individual claims or remedies. See 28 U.S.C. § 1447(c) (setting forth conditions

for remand of “cases”); see also Fuentes v. Dish Network, LLC, No. 23-15865,

2024 WL 4234486, at *2 (9th Cir. Sept. 19, 2024) (affirming denial of plaintiff’s

request for a partial remand of request for public injunction because it improperly

sought remand of a remedy and “a portion of a claim”). Plaintiff identifies no

binding authority permitting—let alone requiring—remand under these

circumstances, where the Court undisputedly has both subject-matter and equitable

jurisdiction over every claim in Plaintiff’s complaint and most of the remedies he

seeks. Cf. Ruiz v. Bradford Exch., Ltd., 153 F.4th 907, 913 (9th Cir. 2025)

(holding that a district court that lacks equitable jurisdiction over the entirety of a

removed case has authority to remand).

Plaintiff relies heavily on a recent district court decision remanding a similar

action brought by Plaintiff’s counsel against Navient, in which the court concluded

that “depriving Plaintiff of an unwaivable right based in California state public

policy”—i.e., a claim for public injunctive relief—“would be an affront to the

delicate balance of federal-state relations.” Albanese v. Navient Corp., No. 8:25-

CV-02579-DOC, 2026 WL 970228, at *3 (C.D. Cal. Apr. 10, 2026). The Court

declines to follow Albanese for several reasons. First, it did not address the Ninth

Circuit’s decisions in Lee and Fuentes. Second, it relied principally on Clevenger

v. Welch Foods Inc., No. 23-CV-00127-CJC, 2023 WL 2390630 (C.D. Cal. Mar. 7,

2023), stating that “in [Clevenger] the Court remanded the entire matter back to

state court after finding that plaintiffs lacked equitable jurisdiction for their UCL

claim in federal court.” Albanese, 2026 WL 970228, at *3. But in Clevenger, the

sole claim was a request for restitution and injunctive relief under the UCL; there

were no claims over which the court had equitable jurisdiction. Clevenger, 2023

WL 2390630, at *1. Thus, Clevenger does not support remand where a court lacks

equitable jurisdiction over only one remedy in a case. Third, the central predicate

of Albanese—that absent remand, the plaintiff would be unable to pursue a public

injunction—does not apply here, where Plaintiff admits that if his claims seeking a

public injunction are dismissed for lack of jurisdiction, he could refile them in state

court. Dkt. No. 22 at 4 n.1.

Nor has Plaintiff shown that he is entitled to relief under the Colorado River

abstention doctrine, which is “available only in situations involving the

contemporaneous exercise of concurrent jurisdictions.” Kirkbride v. Cont’l Cas.

Co., 933 F.2d 729, 734 (9th Cir. 1991) (finding Colorado River abstention

inapplicable where defendant removed the entire case, leaving no concurrent state

proceeding). Plaintiff’s request for a partial remand seeks to create a parallel state

proceeding that does not otherwise exist, creating the very problem Colorado River

abstention is intended to redress.

In sum, even assuming that Plaintiff cannot receive part or all of his

requested injunctive relief in federal court, the Court has jurisdiction to adjudicate

his claims, and Plaintiff has not shown that remand is permitted, much less

required. Plaintiff’s motion to remand is therefore denied. His request for

attorneys’ fees and costs is also denied, as Defendants did not lack “an objectively

reasonable basis for seeking removal.” Martin v. Franklin Capital Corp., 546 U.S.

132, 141 (2005).

III.

The Court turns next to Defendants’ motion to dismiss. Defendants argue

that Plaintiff’s claims (except those under the PSLCRA) are predicated on time-

barred conduct by AIOC and otherwise do not state a claim for relief. Dkt. No. 13.

Defendants also argue that Plaintiff lacks Article III standing to seek a public

injunction and that the requested injunction is overbroad.

A.

To survive a Rule 12(b)(6) motion, a plaintiff must allege “enough facts to

state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550

U.S. 544, 570 (2007). A claim has “facial plausibility” if the facts pleaded

“allow[] the court to draw the reasonable inference that the defendant is liable for

the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). All well-

pleaded factual allegations must be accepted as true, but a court need not credit

“[t]hreadbare recitals of the elements of a cause of action” or “a legal conclusion

couched as a factual allegation.” Id. (cleaned up).

B.

Defendants move to dismiss Plaintiff’s claims for declaratory judgment and

violations of the SBBR, Rosenthal Act, CCRAA, and UCL.3 The Court addresses

each challenged cause of action in turn.

1.

Plaintiff seeks a declaratory judgment that his loans are unenforceable—and

therefore not subject to collection—because they were the result of fraud by AIOC.

Compl. ¶¶ 163–68, 233–38. He asks the Court to adjudicate the validity of this

fraud defense and argues that the defense is applicable against Defendants pursuant

3 For all claims except violation of the UCL, the complaint alleges two separate

causes of action addressing different loans, but the parties address them together

without distinction and the Court does the same.

to the Holder Rule, which provides that the holder of consumer credit contracts is

“subject to all claims and defenses which the debtor could assert against the seller”

of the goods and services. 16 C.F.R. § 433.2. Defendants respond that Plaintiff

misconstrues the scope of the Holder Rule and that his fraud-based claims are, in

any event, time-barred because the alleged fraud occurred more than 15 years ago.4

It is undisputed that the Holder Rule may be raised as a defense to a

collections suit but does not give rise to an affirmative private right of action. E.g.,

Choudhuri v. Specialized Loan Servicing, No. 22-CV-06993-JST, 2023 WL

6277327, at *4 (N.D. Cal. Sept. 26, 2023) (no private right of action). Defendants

argue that Plaintiff is improperly attempting to use the Holder Rule offensively.

Defendants have not shown, however, that Plaintiff’s reliance on the Holder Rule

in his claims for declaratory relief—which does not seek damages—is barred. The

Declaratory Judgment Act, which is applicable to removed cases involving

requests for declaratory relief, Golden Eagle Ins. Co. v. Travelers Companies, 103

F.3d 750, 753 (9th Cir. 1996) (cleaned up), authorizes courts to declare the rights

of interested parties in “a case of actual controversy,” 28 U.S.C. § 2201. For such

a claim to be justiciable, there must exist “a substantial controversy, between

parties having adverse legal interests, of sufficient immediacy and reality to

warrant the issuance of a declaratory judgment.” Md. Cas. Co. v. Pacific Coal &

Oil Co., 312 U.S. 270, 273 (1941).

Defendants contend that the loans are fully enforceable. Plaintiff disagrees,

arguing that AIOC’s fraud makes the debt unenforceable. Defendants have

rejected that argument, declining to discharge the loans and allegedly engaging in

continued harassing collection efforts. Where there is a sufficiently immediate

4 Defendants raise these arguments more broadly against Plaintiff’s claims as a

whole, treating the action as principally premised on the Holder Rule. They

acknowledge, however, that “[t]o the limited extent Plaintiff alleges claims based

on [Defendants’] independent servicing conduct—such as purportedly unfair or

abusive collection practices—rather than AIOC’s alleged misconduct, Plaintiff’s

misapplication of the Holder Rule does not eliminate those claims as a matter of

law.” Dkt. No. 13 at 10 n.3. The claims for declaratory relief are therefore the

only claims that depend entirely on the Holder Rule, and the Court limits its

analysis of the rule to those claims because it would not otherwise provide a basis

to dismiss Plaintiff’s remaining claims. See Franklin v. Midwest Recovery Sys.,

LLC, No. 8:18-CV-02085-JLS, 2020 WL 3213676, at *1 (C.D. Cal. Mar. 9, 2020)

(explaining that Rule 12(b)(6) “does not provide a mechanism for dismissing only

a portion of a claim”) (collecting cases).

controversy, “[a] potential defendant may preempt a suit by a potential plaintiff—

the latter of whom could sue pursuant to an independent cause of action—and seek

a declaration that the potential plaintiff’s claim would fail.” City of Reno v. Netflix,

Inc., 52 F.4th 874, 879 (9th Cir. 2022). Here, Plaintiff would raise AIOC’s

misconduct as a defense to a collection action by Defendants, which Defendants

concede would be a permissible use of the Holder Rule. See Dkt. No. 13 at 6

(agreeing that the Holder Rule may be used to defend against a collections

lawsuit). Defendants have not shown that Plaintiff must stop making payments

and subject himself to a lawsuit to obtain an adjudication of his obligation to pay,

particularly where Defendants allegedly continue to attempt to collect the debt.

Nor have Defendants shown that the declaratory judgment claim is untimely.

A declaratory judgment claim is subject to the same statute of limitations as the

underlying cause of action that the declaration would adjudicate. Levald, Inc. v.

City of Palm Desert, 998 F.2d 680, 688 (9th Cir. 1993); see also, e.g., Int’l Ass’n of

Machinists & Aerospace Workers v. Tenn. Valley Auth., 108 F.3d 658, 668 (6th

Cir. 1997) (“Because a declaratory judgment action is a procedural device used to

vindicate substantive rights, it is time-barred only if relief on a direct claim would

also be barred.”). Plaintiff’s requested declaratory judgment seeks adjudication of

a defense to Defendants’ anticipated enforcement action, and Defendants have not

shown that such a defense would be barred by the statute of limitations if they filed

suit.

Accordingly, Defendants’ motion to dismiss the declaratory judgment claims

is denied.

2.

Plaintiff brings claims under the SBBR based on four types of alleged

misconduct: (1) failing to respond to his qualified written requests; (2) making

harassing collection calls; (3) misrepresenting that AIOC’s alleged fraud did not

affect his loan obligations; and (4) offering a “sham” discharge process for school

misconduct.

Defendants move to dismiss these claims, arguing that they are time-barred

and improperly premised on AIOC’s fraud, which Plaintiff discovered in 2010.

But Defendants concede that the claims are not barred to the extent they arise from

their own independent servicing conduct. Dkt. No. 13 at 10 n.3. This concession

is largely dispositive. Plaintiff’s SBBR claims—including allegations that

Defendants made harassing collection calls, failed to respond to information

requests, misrepresented his loan obligations, and offered a sham discharge

process—are based on Defendants’ conduct and grounded in the SBBR’s

prohibition on “abusive acts or practices” by loan servicers that do not depend on

the Holder Rule. See Cal. Civ. Code § 1788.101(a)(1)–(2)(A) (prohibiting acts that

“[m]aterially interfere[] with the ability of a borrower to understand a term or

condition of a student loan”); id. at § 1788.101(b)(1)–(2) (prohibiting loan

servicers from “employ[ing] a scheme, device, or artifice to defraud or mislead a

borrower” or “misrepresent[ing] or omit[ting] material information”); id. at

§ 1788.102(t)(1) (requiring a servicer to respond to qualified written requests).

Because Defendants do not meaningfully challenge the sufficiency or timeliness of

these claims, their motion to dismiss the SBBR claims is denied.5

3.

Plaintiff asserts claims under the Rosenthal Act based on Defendants’

collection call activities and alleged misrepresentation about the legal status of the

debt—i.e., representations that AIOC’s fraud does not affect Plaintiff’s repayment

obligations. Compl. ¶¶ 136–47, 207–18. Defendants argue that the harassment

allegations are too conclusory because the complaint does not provide sufficient

details about the time and substance of the calls and that Defendants’ disagreement

with Plaintiff about whether his loans are enforceable does not qualify as a

misrepresentation.

The Rosenthal Act prohibits repeated or continuous telephone calls that

annoy or harass, Cal. Civ. Code § 1788.11(d)–(e), and prohibits third-party

contacts for purposes other than obtaining location information, id. §§ 1788.12,

1788.17 (incorporating federal prohibitions). Plaintiff’s allegations that he

received more than 45 calls in a month, that Defendant has called him “multiple

times per day for days on end,” and that Defendants disclosed the nature of his

debt to his employer are sufficient at the pleading stage. Compl. ¶¶ 90–93; see

Alborzian v. JPMorgan Chase Bank, N.A., 235 Cal. App. 4th 29, 38 (2015) (“The

making of frequent calls itself can constitute actionable harassment under the

Rosenthal Act.”); Bruner v. AllianceOne Receivables Mgmt., Inc., No. 15-CV-

9726, 2017 WL 770993, at *3 (N.D. Ill. Feb. 28, 2017) (denying motion to dismiss

5 In their reply, Defendants for the first time argue that the qualified written request

allegations are insufficiently specific to state a claim. The Court need not consider

arguments first raised in a reply. Zamani v. Carnes, 491 F.3d 990, 997 (9th Cir.

2007). And even if correct, Defendants’ argument would not dispose of the full

SBBR claim. Cf. Franklin, 2020 WL 3213676, at *1 (Rule 12(b)(6) does not

permit dismissal of only a portion of a claim).

claims under the federal provisions incorporated into the Rosenthal Act where

plaintiff alleged eleven calls over six weeks); Carr v. NCO Fin. Sys., Inc., No. 11-

CV-2050, 2011 WL 6371899, at *3 (E.D. Pa. Dec. 20, 2011) (same for nine calls

in 30 days). Because Plaintiff states a claim under the Act under at least one

theory, the Court need not consider all theories in the cause of action at this stage.

Franklin, 2020 WL 3213676, at *1. Accordingly, Defendants’ motion to dismiss

the Rosenthal Act claims is denied.

4.

Plaintiff alleges that Defendants violated the CCRAA by reporting his loans

to consumer reporting agencies without disclosing that he disputed the

enforceability of the debt or that the loans were induced by fraud. Compl. ¶¶ 148–

62, 219–32. He alleges that he submitted multiple discharge applications, sent

correspondence disputing the loans, and filed complaints, thereby putting

Defendants on notice of a bona fide dispute that Defendants failed to report.

The parties’ briefing on Plaintiff’s CCRAA claims raises issues that have not

been adequately addressed. Defendants’ motion argues that the claim fails

“because Defendants had no statutory duty to report his loan as ‘disputed’ based

solely on his submission, and subsequent denial, of a school-misconduct discharge

application.” Dkt. No. 13 at 13. The motion notes in passing the allegation that

Defendants failed to disclose that they knew the loans were procured by fraud but

does not address why that allegation does not state a claim separate from the issue

of whether Defendants had an obligation to report the loan as disputed. In

opposition, Plaintiff for the first time identified as the basis for his claims two

specific provisions of the CCRAA not referenced in his complaint: Cal. Civ. Code

§ 1785.25(a), which prohibits a furnisher from reporting information it knows to be

incomplete or inaccurate, and § 1785.25(c), which requires a furnisher to include

dispute notations. Responding to Defendants’ framing of the issue in their motion,

Plaintiff focused only on whether Defendants had a duty to report his dispute of the

debt.

In its tentative order, the Court raised preemption, which the parties had not

addressed. As noted in the tentative order, the Ninth Circuit has held that the

prohibition on furnishing incomplete or inaccurate information is the only

substantive CCRAA furnisher provision that is not preempted by the Fair Credit

Reporting Act (FCRA). Carvalho v. Equifax Info. Servs., LLC, 629 F.3d 876,

888–89 (9th Cir. 2010); see also Tuck v. Portfolio Recovery Assocs., L.L.C., No.

19-CV-1270, 2019 WL 6497758, at *2 (S.D. Cal. Dec. 3, 2019) (dismissing claims

under § 1785.25(c) as preempted by FCRA). And courts have concluded that

claims about a furnisher’s failure to note disputes fall exclusively under

§ 1785.25(c) and cannot be raised under § 1785.25(a) as an end-run around

FCRA’s preemption of the dispute-notice requirements in subsection (c). See

Wang v. Asset Acceptance, LLC, 681 F. Supp. 2d 1143, 1148–9 (N.D. Cal. 2010)

(holding that the general obligation in § 1785.25(a) cannot have been intended to

include the dispute-notation obligation that § 1785.25(c) separately and

specifically imposes); Faircloth v. AR Res., Inc., No. 19-CV-05830, 2020 WL

2747781, at *5–7 (N.D. Cal. May 27, 2020) (following Wang); Marseglia v. JP

Morgan Chase Bank, No. 09-CV-2857, 2011 WL 13134334 (S.D. Cal. Aug. 3,

2011) (same). Because the parties had not addressed this issue, the Court in its

tentative order gave Plaintiff “the opportunity at the hearing to identify authority

showing that his CCRAA claims are not preempted.” At the hearing, Plaintiff

conceded that a claim under § 1785.25(c) is preempted but urged the Court to

reject Wang, Marseglia, and Faircloth and hold instead that a claim for failure to

report a dispute may be brought under § 1785.25(a) even though the obligation to

report the dispute under § 1785.25(c) is preempted. When asked for supporting

authority, Plaintiff identified only Gorman v. Wolpoff & Abramson, LLP, the

foundational Ninth Circuit case holding that a private right of action under

§ 1785.25(a) is not preempted. 584 F.3d 1147, 1172 (9th Cir. 2009). Gorman

does not address the scope of the claims that may brought under § 1785.25(a), and

both Wang and Faircloth relied on Gorman and do not appear to be in tension with

it.

While the Court has doubts about Plaintiff’s ability to bring a claim for

failure to note a dispute under § 1785.25(a), it declines to adjudicate that issue on

this record, where Plaintiff has not had a full opportunity to brief it, because

Defendants’ motion does not meaningfully address Plaintiff’s alternative theory of

CCRAA liability—namely, the failure to report that the loans were induced by

fraud. See, e.g., Compl. ¶ 153 (“Defendants furnished information indicating that

Mr. Ramos is undisputedly obligated to pay Loan 4635 even though Defendants

knew the loan was induced through fraud[.]”). At the hearing, Plaintiff invoked

this allegation as an independent basis for CCRAA liability. Defendants have

made no attempt to show that, accepting as true the allegation that they knew the

loans were procured by fraud, their failure to report that fact did not make their

reports inaccurate or incomplete under § 1785.25(a). Accordingly, they have not

shown that they are entitled to dismissal of Plaintiff’s CCRAA claims.

5.

Plaintiff also asserts a UCL claim based on the same alleged servicing and

collection misconduct, alleging that Defendants engaged in unfair, deceptive, and

unlawful business practices. Compl. ¶¶ 239–52. He seeks restitution and

injunctive relief. Defendants move to dismiss this claim, arguing that Plaintiff has

not sufficiently alleged economic injury and that any injury was caused by AIOC,

not Defendants.

A plaintiff has standing under the UCL only if he has “suffered injury in fact

and has lost money or property as a result of the unfair competition.” Cal. Bus. &

Prof. Code § 17204. In their motion, Defendants note that “Plaintiff alleges his

economic injury includes ‘payments made, credit damage suffered and credit

opportunities lost as a result, ongoing liability for the alleged debt that should have

been cancelled and is unenforceable, and postage paid to dispute the alleged debt

and to request information that should have been provided.’” Dkt. No. 13 at 15

(quoting Compl. ¶ 250). But Defendants address only some of the alleged

injuries—primarily Plaintiff’s continued liability on the debt, which they argue

stems from Plaintiff’s agreement with AIOC rather than Defendants’ conduct. The

motion does not meaningfully address the other alleged harms, however, including

credit damage, lost credit opportunities, and expenses incurred in disputing the

debt. At least at the pleading stage, those alleged injuries appear potentially

cognizable and plausibly attributable to Defendants’ service and collection

conduct. See, e.g., Fernandez v. Progressive Mgmt. Sys., No. 3:21-CV-00841,

2022 WL 2541272, at *4 (S.D. Cal. July 7, 2022) (collecting cases for the

proposition that credit damage is a cognizable economic injury under the UCL).

The Court has questions about the adequacy of Plaintiff’s allegations of

economic harm, which are largely conclusory. Because Defendants have not

challenged all the asserted harms, however, they have not shown on this record that

they are entitled to dismissal of Plaintiff’s UCL claim.

6.

Finally, Defendants challenge Plaintiff’s request for a “public injunction.”

But the motion—though not styled as a Rule 12(b)(1) challenge—conflates Article

III standing with arguments about the permissible scope of equitable jurisdiction.

Defendants principally argue that the requested injunction is overbroad, yet they

cite no authority suggesting that the precise scope of injunctive relief must be

resolved at the pleading stage. Nor have they shown that Plaintiff could not obtain

at least some narrower injunctive relief tied to his alleged injuries, such as relief

barring further harassing collection calls. Indeed, their overbreadth argument

implicitly recognizes that some more tailored relief may be appropriate. On this

record, Defendants have not shown that Plaintiff's request for injunctive relief

must be dismissed.

IV.

For the foregoing reasons, Plaintiff's motion to remand and Defendants’

motion to dismiss are denied. Defendants shall answer the complaint no later than

June 8, 2026.

Date: May 29, 2026 _OrireS,

Stanley Blumenfeld, Jr.

United States District Judge

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